Retailer and manufacturer advertising scheduling in a marketing channel

Abstract

Despite the fact that the use of sporadic advertising schedules is well established in both the advertising literature and market place, the marketing channel literature that focuses on vertical interactions has consistently prescribed continuous advertising strategies over time. This paper investigates, in a bilateral monopoly context a situation in which a manufacturer and a retailer control their pricing and advertising decisions, the optimal scheduling of advertising in a planning horizon of three periods. We found that, consistent with the advertising literature, the integrated channel adopts pulsing to benefit from advertising positive carryover effects. Conversely, when pricing and advertising decisions are uncoordinated, channel members can optimally implement each of the following three advertising schedules. The full continuous schedule where channel members advertise in the three periods. The full pulsing schedule in which the two channel members advertise only in the first and third periods. The mix schedule where the retailer advertises in the three periods and the manufacturer advertises exclusively in the first and third periods. Depending on the magnitude of the long-term effects of retailer and manufacturer advertising, each of the three schedules can be implemented.

Manufacturer defensive and offensive advertising in competing distribution channels

“…Finally, this work could also be extended to integrate local advertising at the retail level. This will add another layer of difficulties given that channel members may not agree on the type of advertising to conduct, on top of the traditional vertical free-riding issue in such a context (Martín-Herrán and Sigué, 2017).…”

Coordinating a Green Agri-Food Supply Chain with Revenue-Sharing Contracts Considering Retailers’ Green Marketing Efforts

“…Therefore, in order to increase the purchasing consciousness of consumers, retailers need to make green marketing efforts, which result in additional costs associated with the greening level. The quadratic cost function is widely used in the literature of marketing [25,52]. We assume that the retailer's green marketing cost is a quadratic function of the greening level of agri-food.…”

“…However, some empirical studies indicate that green marketing plays an important role in promoting green products to achieve supply chain sustainability [23,24]. Retailer marketing, also known as local advertising, refers to advertising or promotional activities conducted by retailers to promote sales locally [25]. Retailers can turn consumers' green awareness into actual buying behavior through green marketing [24].…”

Pricing, Carbon Emission Reduction, Low-Carbon Promotion and Returning Decision in a Closed-Loop Supply Chain under Vertical and Horizontal Cooperation

“…Song et al [21] studied integrated firms’ innovation and advertising decisions in a two-echelon supply chain. Martín-Herrán and Sigué [22] in a bilateral monopoly, investigated the optimal scheduling of retailer and manufacturer advertising in a three-period planning horizon. The above-mentioned studies only consider the advertising strategy of the supply chain with a manufacturer and a retailer, but they did not consider the competition between two retailers’.…”